Summers Says Trump Presidency Brings Uncertainty

A few weeks ago, former U.S. Treasury Secretary Lawrence Summers said investors are being “far too sanguine about the risks associated with Donald Trump’s incoming administration,” according to a Bloomberg article.

Summers, now a professor at Harvard, referred to the changes on the horizon for both foreign and domestic policy as forces creating “extraordinary uncertainty.” In a Bloomberg television interview, Summers said, “This is probably the largest transition ideologically and in terms of substantive policy that we’ve seen in the U.S. in the last three quarters of a century,” although he doesn’t believe this has been fully recognized by the markets.

The professor was blunt in his criticism of a report on Trump’s growth plans which was co-authored by economist Peter Navarro (who will lead the newly formed White House National Trade Council) and Commerce

Department head Wilbur Ross. Summers dismissed the idea that any tax policy intended to encourage repatriation of profits would increase investment and hiring. “The Navarro-Ross paper,” he asserted, “is well beyond voodoo economics,” adding that the ideas outlined are “so far out of the mainstream…that they are the economic equivalent of creationism.”